Less than half of the world's population can answer this incredibly simple financial question

A
teacher lecturing at a cram school in a Goshichon, which means
"exam village" in Korean, in Seoul in 2012.REUTERS/Lee Jae-Won

A major survey on financial literacy has just been published, and
the results are terrible.

McGraw Hill Financial (which owns S&P), the World Bank, and
Gallup have produced the S&P Global Financial Literacy
Survey, which attempted to get an idea of how financially
literate the world is by polling 150,000 adults in more than 140
countries.

The group defined financial literacy as the ability to answer
three of four really simple questions about inflation, risk, and
interest.
Take a look.

One of the easiest questions on the test is about interest. There
is no compounding involved, and the numbers themselves aren't at
all complicated. Here it is:

It's a bit terrifying that only 49% of the
people polled around the world could answer that question. The
country results ranged hugely. Just 16% of respondents in Yemen
answered the question correctly, in comparison to 79% in
Turkmenistan.

Even once the poorest parts of the world are excluded from the
test and only OECD-member rich countries are included, the
proportion getting the answer right rises to just 59%.

Only a third of those surveyed could get three out of four of the
questions correct, giving the world a financial-literacy rating
of just 33%. Again, when that's using only the
OECD countries, it rises to 53%, but it's still pretty
depressing.